The stock was up 1% in afternoon trading, and sources close to News Corp. insist that the separation will have no bearing on the company.
“There could be other cases where you wonder whether there’s someone else running the show, but in this case I don’t think anybody doubts that he’s running the show,” said RBC analyst David Bank, who covers News Corp.
The chairman-CEO of News Corp. filed divorce papers Thursday morning in New York State Supreme Court. A News Corp. rep confirmed the filing, which was made under seal, but declined further comment. The complaint is said to cite as a cause that “the relationship between husband and wife has broken down irretrievably.”
Rupert Murdoch is being repped in the divorce by attorney Ira Garr, who has represented high-profile figures such as Ivanka Trump. Garr declined comment because his law firm said it is a “private matter.”
Wendi Murdoch and her two children with the media mogul, Chloe and Grace, are not voting members of the Murdoch Family Trust that controls the majority of News Corp.’s voting shares.
Control of that trust has been hotly contested within the Murdoch clan. In 2005, Murdoch sought to increase his youngest childrens’ interest in the trust, which holds billions of dollars of News Corp.’s controlling stock. But Murdoch ran into opposition from his second wife, Anna, as well as their adult children, Lachlan, James and Elisabeth Murdoch. The two youngest kids ended up with small ownership stakes.
Murdoch’s adult children are voting members in the trust.
Wendi Murdoch, who worked for former News Corp. subsidiary Star TV in Hong Kong, has been active in News Corp.’s affairs. She has been involved in some of the conglom’s Chinese ventures, and received a producing credit on the 2011 film “Snow Flower and the Secret Fan” for Fox Searchlight. She’s often been seen at her husband’s side, and famously intercepted a pie thrown at him as he testified before Parliament about the hacking scandal two years ago. At this year’s Oscars, she helped shepherd her husband between photographers on the red carpet.
Wendi Murdoch is Rupert Murdoch’s third wife, who he married in 1999 in New York less than a month after his split from second wife, whom he reportedly paid $1.7 billion settlement at the time of their divorce.
Rupert Murdoch also has an adult daughter, Prudence, from his first marriage.
Murdoch’s personal separation comes ahead of News Corp.’s own planned split between its publishing and entertainment units, which the company expects to complete June 28.
Rumors of the split between Rupert and Wendi Murdoch have swirled for more than a year but have been steadfastly denied by News Corp. and reps for the couple. Sources said company reps and Rupert Murdoch’s personal PR reps were caught off guard by Thursday’s filing.
One lingering question is why Murdoch filed for divorce in New York (he has homes in California and New York). Laura Zwicker, partner at Greenberg Glusker, said that there is good reason for it: The Empire State is much more amendable to plaintiffs filing divorce cases under seal, whereas “it is very hard to get proceedings sealed in California.”
“It seems to be a trend of high-profile figures filing in New York,” where they would have to merely establish that they were married in that state, have resided there or that the cause of their divorce occurred there, Zwicker said.
She also said that the “likelihood of a premarital agreement is probably 100%,” based on the assurances that sources within the company seem to be sending to Wall Street that the breakup of the Murdoch’s marriage will have no impact on operations. New York is not a community property state, but it does recognize the concept of marital property versus separate property.